- Metropolitan Bank announced a second $50 million share repurchase program, following a previous $50 million buyback at a discount to book value.
- The company also declared its first dividend as a publicly traded entity, emphasizing a focus on long-term shareholder value.
- Management indicated that they do not plan to raise additional capital in the near term, but remain open to reevaluating opportunities.
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- TrustCo's strategy over recent years has been to amass capital specifically to lend out during periods of favorable interest rates.
- The company has capitalized on rising loan demand and competitive borrowing conditions to increase lending activities.
- This approach has supported margin expansion and loan growth, with a focus on community lending.
- Allowance for credit losses was $51.6 million or 1.26% of gross loans, down from $54.9 million in the prior quarter.
- Earnings for the June quarter were $1.39 diluted, unchanged from the prior quarter but up 17% year-over-year.
- Full year fiscal '25 earnings were $5.18 compared to $4.42 in fiscal '24, driven by stronger net interest income from 7% earning asset growth and net interest margin expansion.
- Net charge-offs totaled $5.3 million for the quarter, primarily from a special purpose CRE loan and a commercial contractor credit.
- Net interest margin for the quarter was 3.46%, up from 3.39% in the prior quarter, benefiting from higher loan yields and deployment of excess cash into loans.
- Noninterest expense rose 2.3% due to $425,000 consulting expenses and increased data processing costs.
- Noninterest income increased 9.2% quarter-over-quarter, driven by an additional card network bonus of $537,000.
- Provision for credit losses increased to $2.5 million from $932,000 in the prior quarter due to net charge-offs and loan growth.
- Quarterly dividend increased by $0.02 or 8.7% to $0.25 per share.
- Return on average assets was 1.21% and return on average equity was 11.4% for fiscal 2025.
- Tangible book value per share increased by $5.19 or just above 14% over the last 12 months to $41.87.
- KW deployed or committed $1.7 billion in new capital in Q2, bringing total deployment to $2.6 billion for H1 2025, on track to surpass $4.3 billion in 2024.
- The company successfully executed over $600 million in noncore asset sales, generating $250 million in cash, exceeding the $200 million target.
- Proceeds from asset sales are primarily used to reduce unsecured debt, including a $350 million repayment of KWE bonds due in October, fully retiring the $650 million 2025 bonds.
- KW plans to continue recycling capital into higher-return opportunities, emphasizing a strategic focus on asset sales and debt reduction.
- Third Coast Bancshares closed its second securitization deal in the quarter, demonstrating the viability and replicability of its securitization strategy.
- The transaction reduces risk-weighted assets, lowers construction concentrations, and mitigates credit risk.
- The company was nominated for North American Transaction of the Year and North American Issuer of the Year at the 2025 SCI Risk Sharing Award Ceremony in London.
- Executed an additional securities repositioning at the end of Q2, resulting in a $8.5 million net loss but expected to be accretive to future earnings.
- Repositioning is projected to add 13 basis points to net interest margin and $0.20 of annual EPS, primarily benefiting Q3.
- Management emphasized the strategic importance of this move for margin expansion and earnings growth.
- The company has strategically repositioned its balance sheet to reduce asset sensitivity, aiming to drive consistent net interest income growth throughout interest rate cycles.
- Focus on enhancing ability to adapt to changing rates, with a clear long-term success plan.
- Jay Sidhu announced transition to Executive Chairman effective January 1, 2026, with Sam Sidhu becoming CEO.
- Highlight of the company's growth from a $200 million asset bank in 2009 to a $22 billion national franchise.
- Emphasis on attracting top talent and building a high-performance, innovative management team.
- Operating earnings of $106 million, a record for the company, representing a $0.03 linked quarter increase.
- First $100 million operating net income quarter in company history.
- Share repurchases of 522,000 shares at an average price of $16.9, with ongoing capital return strategy.
- The company's CRE pipeline reached over $5 billion in June, indicating a robust build-up of new opportunities.
- Management expects the CRE pipeline to continue building through the second half of the year, potentially leading to growth later in 2025.
- The recent sale of out-of-footprint CRE loans was a strategic move to focus on core markets and relationships.
- CRE criticized balances declined by $813 million, but the pipeline's growth suggests future loan originations could offset this decline.
- Management sees the CRE pipeline as a key driver for future growth, with a focus on serving clients and managing risk.
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